Steve Lekas is co-founder and CEO of Branch Insurance, a rising star in the insurance industry based out of Columbus, Ohio, offering bundled Home & Auto insurance powered by the community. Branch believes that insurance must get back to being a force for communal good and has made it their mission to restore insurance to its original role.
1. Tell us about your role at Branch?
In 2018, I founded Branch with Cofounder and tech entrepreneur Joe Emison, with the mission of making insurance less expensive, allowing more people to be insured. From the beginning, we knew we had to be able to bundle in order to maximize client savings, and because bundling can be so difficult, our goal was to amplify the value of bundling by decreasing the effort to bundle. Now, just two years later, I have the privilege of leading and working alongside the best team in the business as the CEO of Branch, as we continue our nationwide expansion.
2. Can you tell us about your journey into this market?
I grew up in insurance working within large insurance companies in claims, technology, underwriting and product. I fell in love with the incredible human-made complexity of such a simple idea: each of us within a community pooling small resources, so that the few of us who suffer catastrophe can take big chunks and all of us remain safe. I had the wonderful experience of building the U.S.’s first online home insurance business, as well as running a business that provided data and predictive models to insurance companies. Through data and technology, I saw the ability to simplify a significant part of insurance’s complexity that plays a significant factor in the price we pay for insurance. I founded Branch with a mission to make insurance less expensive, easier to use and remind us all that an insurance company doesn’t save you — it’s Us, a community that saves each other. Less expensive insurance allows more of us to be insured and safe. That was a mission worth taking a risk to bring to life.
3. How do you think technology is upgrading financial sector?
Technology is allowing transparency, convenience and savings. That’s why we love it. And many of us would move to transparency, convenience or savings, but so frequently the technology we love gives us all three, which makes it so compelling. Someday, people will find it hard to understand how we used to rely on paper moving or callbacks between people.
4. How has application of technology empowered insurance industry?
The first known insurance underwriting and risk segmentation was a technological innovation from the 1800s that has had a huge rippling effect through insurance. That occurred when the Philadelphia Contributionship for the Insurance of Houses from Loss Fire found that trees impeded firefighting, so they made homes with surrounding trees ineligible for insurance. The Mutual Assurance Company for Insuring Houses from Loss by Fire was started by ex-Philly employees who varied the price for homes with trees versus those without. Those trees were the inspiration for Branch’s name.
The single-most impactful innovation was likely George Mecherle who founded State Farm, having noted the distinctly lower price farmers should’ve been paying for insurance but weren’t able to. He founded State Farm on that idea and grew to the largest auto insurer in 20 years, causing Nationwide, Farmers and many other huge insurers of today as a result of this data innovation.
Today, we have access to data and software that allows us to find more value for consumers. Branch gives its clients the ability to refer for mutual benefit, act as a non-fraud reference for their friends and family, get an instant price and purchase in seconds in a way no one has ever been able to do before — all of this and so much more made possible through technology.
5. Can you explain how bundling of insurance helps customers as well as the insurance company?
Bundling home and auto insurance is beneficial for clients because it maximizes their savings, while also allowing them to have a consolidated place to view their policy and billing information. It simplifies communication, too: for example, you only need to call Branch to add a new driver and also increase your limits on your house. Bundled insurance also has one simple claims process that saves time and effort. Insurers are more efficient when they manage multiple policies for a client and since we pass those efficiencies on as savings, clients stay with us longer – not only for the savings, but also the added convenience of managing fewer relationships. For Branch, that means we can create deeper relationships with our community members for long stretches of time, which is the reason we get out of bed each morning.
6. What features of your insurance solution differentiates it in the market?
Branch has numerous features that set us apart from other insurance companies in the market, the most prominent being our ability to provide the quickest and simplest process for bundling home and auto insurance. With only two pieces of information, we can present clients with a bindable price – compared to other insurance providers in the market who will ask customers upwards of 50 questions before giving a price. Another key way we differentiate ourselves from competitors is completing this process entirely online, allowing customers to shop for insurance when it’s convenient for them, virtually anywhere. Branch has recently launched several unique programs, offering additional discounts to clients unlike any other in the market, including:
- Refer and Earn: For every client you refer that joins Branch, you get a $25 gift card and they will get a $10 gift card.
- My Community Discount: Currently available in Arizona and Missouri, this discount allows you to save on your insurance for every client that joins Branch from your referral. When you refer someone and they join Branch, not only do you receive a $25 gift card and your referral a $10 gift card, but you also receive 1% off your insurance and your referral receives 0.5% off. The discount remains as long as your referral stays with Branch.
- Community Pledge: Now that you and your referral are Branch clients, your referral can ask you to take the Community Pledge for them. In doing so, you are stating that your referral is not likely to defraud Branch with a fake claim. This allows your referral to get 1% off their insurance up to 5% at renewal.
- SafetyNest®: Branch is rooted in community and the spirit of having each others’ backs. SafetyNest is our pending 501(c)(3) nonprofit entity, designed and funded exclusively by Branch, meant to support those who are un- or underinsured and facing financial hardship.
7. What are your predictions about the future of insurtech?
The startup insurance writers who serve consumers will begin innovating on the business model, the capital structure, the insurance product and fundamental underwriting. The technology that serves insurance writers will bring many innovative tools that allow writers to provide new and better transparency, convenience and price to consumers. It is a highly competitive market but it is not efficient, allowing new entrants to create added value for consumers. It is difficult to predict whether the current iteration of venture-backed insurtech will be a hot area in the future, which will depend on whether the early class of investments shows an ability to exit successfully.
8. What advice would you like to give to the technology Start Ups?
Solve a meaningful problem.
Startups who are clear on their mission – the problem they solve for their customer – will have a much greater chance of success.
10. How do you prepare for an AI-Centric world?
Become familiar with AI’s capability and prepare for its future. Most of what I see in today’s AI is advanced statistical modelling applied within a narrowly defined use case. With an understanding of AI’s capability – like an understanding of many disciplines of technology and data science – you can see problems through the lens of AI solution abilities and use them to solve problems , which also enables you to evolve as the world does through technology.
11. What are the major developments you are planning, in recent time?
Currently, Branch is in 5 states (AZ, IL, MO, OH and TX) and planning to be nationally available by the end of 2021.
12. Can you tell us about your team and how it supports you?
We have an amazing team full of experts with vast experience in technology, growth and most importantly, insurance. I’m really proud of each of our team members who have achieved so much already, with so much yet to come. But I’m most proud of the way they support me as a part of the Branch Community. Branch is a different kind of insurer that doesn’t think about itself as a savior to our clients. We facilitate the community’s ability to fund claims and we think of each other and our clients as community members. This is a defining characteristic of how insurance is meant to be and why such a big part of our mission is bringing the industry back to those communal roots. This all starts with each of us getting each others’ backs and that filters through to our clients in each interaction. I’m honored to be working alongside our team day in and day out. Our team is what makes Branch special.
14. We have heard that you have a very joyful work culture, so can you share with us some of the fun pictures of your workplace?
15. Can you give us a glance of the applications you use on your phone?